Carmen Lawrence (Fremantle, Australian Labor Party) Share this | Hansard source

I want to speak very briefly on this motion to make a couple of points that I think deserve some attention. The decision by the New South Wales state government and, indeed, the form in which this decision comes before the House are totally inadequate for such a substantial change in policy. There has been no provision for proper debate. I do not hold the Commonwealth government necessarily solely responsible for that but this parliament should take more care over such an important decision.

We should be in a position to properly canvass the economic case and to check and test the alleged benefits and costs associated with the sale of the corporation. We should be able to explore the possible consequences for environmental flows in the Snowy in particular and for the health of the Murray River, which I know is vital to the consideration of a great many members in this House. What will be the consequences? How will it be affected by this privatisation? We should, in the debate, be in a position to clarify the position of irrigators who are reliant on water flows from the dams. We should discuss the use to which the state and the Commonwealth proceeds will be put. It should be in the form of a piece of legislation which we can examine. Finally, we should be in a position as a parliament to prescribe the community service obligations for what is indeed a complex, public utility.

When Vin Good, the former commissioner for Snowy Hydro, expresses reservations about this sale—and he is no opponent of privatisation—we should pay proper heed, for example, to questions like the one he raised in a recent radio interview. He made the proposition that while Snowy Hydro does not own the water—that is owned by the state—the argument is that as a private company perhaps it should pay for its use, as is the case with some other hydroelectricity schemes. That is one of many questions that we should be properly able to analyse in this parliament.

Ideally, with such a major decision, we should be able to test the claims in advance and not rely, as we are having to, on an amendment to test the claims after the deed is done. We should have been able to look at expert advice and carefully study the various propositions, including the economic case. The sad reality is that the New South Wales government has made a budget not an economic case. Part of the problem is that the New South Wales government, like other governments, including the federal government, has been refusing the necessary capital injection because it has become ridiculously debt averse. We have seen a decline in the quality and quantity of infrastructure around Australia as a result.

The sale of such a major public asset actually requires much more careful consideration particularly in the light of some fairly spectacular failures of privatisation, especially in the electricity market as people in Victoria and South Australia will bear witness. It is not unreasonable to require governments to justify the sale of publicly held assets, firstly to examine the loss of the revenue stream and the loss of control. How will they be able to influence outcomes into the future? Governments must also examine possible market distortion with such a big player depending on the ownership structures that emerge and we have had no discussion of those ownership structures. What sort of sale will it be? There is a very real question around future compensation payments. Whose responsibility will they be? The current CEO says it will cost hundreds of millions more in compensation to reach the 28 per cent environmental flows that are agreed but not yet achieved. Then there is the nature of the sale itself. Should there be maximum shareholdings and controls on foreign ownership, for example?

I think it is very clear that the sale was provoked not by careful assessment of the case but by the actions of a cash strapped New South Wales government. That is not a very good reason for undertaking a sale, especially, as I say, given recent experiences with private operators in New South Wales, particularly in the transport industry. I would have thought it was cause for caution, given the catastrophe that is the cross-city tunnel for example. We should pause before we sell a national icon—100,000 workers toiled for 25 years to construct it, as we heard from the previous speaker. There have been economic benefits from Snowy Hydro but there have been huge environmental costs as well. There is a debt which is far from being repaid.

We understand that the sale is expected to raise $3 billion to be divided according to the shareholdings of the states and the Commonwealth. That is a lot of money and much of it, as we understand, will go to schools and hospitals in New South Wales and Victoria. The Commonwealth apparently proposes to use it to place in the Future Fund to cover the superannuation liabilities for public servants. I ask the question, as a former state Treasurer, and as the member for Eden-Monaro also speculated, about whether that really would be extra money going to schools and hospitals or whether the states would simply replace existing sources.

The long-term problem is that we have recent agreements on improving environmental flows, particularly in the Snowy, firstly to restore up to 21 per cent then finally up to 28 per cent. Some of the money must be set aside to enable it to happen. To go beyond 21 per cent will require hundreds of millions of dollars in compensation to both irrigators and Snowy Hydro. We should be assured that that has been planned for. But there is no indication in this notice of the mechanisms which will enforce compliance with the higher rate. Allowance obviously does have to be made in those sale proceeds. Significant funds should be put towards repairing the Snowy and the Murray, which we all know has serious problems, especially given drying climate conditions. I have to say, just as a footnote, that everybody understands that the electricity market into which this will feed is far from satisfactory in its operations, and those questions have not been addressed in this motion. In conclusion, because I did only want to be brief, I think this raises a great many questions about the procedures of this parliament and I am deeply worried we have not properly considered this matter.

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